Beyond Evasion: Integrating Carbon Tax Havens into Climate Accountability Frameworks

This study examines the impact of "carbon tax havens" (CTHs) on the accounting and regulation of greenhouse gas (GHG) emissions globally. As carbon pricing mechanisms like the Carbon Border Adjustment Mechanism (CBAM) are increasingly implemented, corporations may be incentivized to relocate their emissions to CTHs where GHG taxes or quotas are absent or ineffective. This research analyzes the effects of these carbon tax havens on the global redistribution of industrial emissions and provides an in-depth investigation of the effectiveness of carbon taxes and markets through empirical data. We highlight the paradox where, despite decades of environmental regulations, global GHG emissions continue to rise, underscoring the need for regulatory reforms that could compel companies to report their emissions by country to enhance transparency and reduce information asymmetries in non-financial reporting. This work calls for the standardization of environmental reporting practices to strengthen the coordination of sustainable development policies at the international level.